Paul Carter

What is an investment bank worth? This deal slipped a little under my radar but I noticed it when reviewing last month's transactions on the platform and it sprung up in The Times too. Evercore has paid £146 million for Robey Warshaw, a boutique investment bank that definitely falls into the 'elephant hunter' category, advising on monster deals that are usually the preserve of the bulge brackets (Goldman Sachs, J.P. Morgan, Morgan Stanley, Bank of America Merrill Lynch, Deutsche Bank, UBS, Citi and Credit Suisse). Recent mandates include the disposal of Reckitt Benckiser's Essential Home business to Advent for $4.8 billion and the acquisition of Keywords Studios by EQT Group for $2.8 billion. As you would expect with a low volume operator in a cyclical sector, revenues fluctuate but most of what does come in accrues to the partners (there were 5, including George Osborne). Last year £86 million in revenue translated into profit before drawings of £70m (actual drawings in the year totalled £43m). The previous year the equivalent numbers were £46m (revenue), £26m (profit) and £25m (drawings). Definitely not shabby. Article below (ignore the huge fish, it's not relevant). #corporatefinance #mergersandacquisitions

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👏 Welcome to the NPIF II portfolio, Holdson! 🙌 We’re pleased to announce that NPIF II – Praetura Equity Finance (which is managed by us on behalf of the British Business Bank) has invested £500k into the advanced manufacturing business, as part of a strategic £1.5m round led by NPIF II. 🔩 Founded by Neil Dickinson and Aaron Holt (pictured below), Holdson is best known for its patented electroform™ process, an electromechanical finishing process to enhance the performance of metal parts, including cast and 3D printed components, by refining their surfaces and removing imperfections. 🛩️ Holdson’s work touches a number of major sectors, including the aerospace, defence, automotive and nuclear fusion industries, who rely on advanced parts that utilise Holdson’s electroform™ technology. 🗞️ Thanks to Insider Media for covering the news, which you can read in full here (https://lnkd.in/eM4GXEaZ). 🤩 Massive congratulations to Laurence Tan, PhD. for all his work on the deal and to the British Business Bank North of England for their ongoing support. A final thank you to Mills & Reeve and Ward Hadaway for their work on the deal.

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New research from Barclays reveals that the UK’s investment gap has grown by over 30% in just two years with 15m UK adults now holding over £610bn of ‘possible investments’ in cash. Investing can deliver better financial outcomes for individuals and supports economic growth. The growing investment gap emphasises that significant efforts are still required to transform the UK into a nation of investors. In recent months, we have seen collaborative action and positive steps from regulators and policymakers – the Advice Guidance Boundary Review and the retail investment reforms announced at Mansion House present a unique opportunity to reshape the UK’s investment culture.  The task now is to turn these reforms into lasting behavioural change, helping savers feel confident, supported and better able to understand risk. That focus on building confidence will be central to industry's work as part of the UK’s new retail investment campaign. Read the full report below ⬇️ https://lnkd.in/egMpcSpx

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On Tuesday, I participated in another excellent British Business Bank event hosted by Barry McCulloch. One of the questions was how hard it is to raise £100-300k in Scotland, and the answer is (very) hard. ▪️ Interest rates are in the 4.5% range, so saving is a credible alternative ▪️ VCs on average haven't done well and struggle to generate a risk-adjusted return that attracts new LP funds. They also have to support their existing investments. Little money is available for new investments. ▪️ The Scotttisch early-stage investment scene, which is still very strong, is slowly destroying itself. Legals are far too complex, high deal and maintenance fees, wrong incentives, and too many advisors who give unsuitable advice. There are a few syndicates, such as Apollo Informal Investments and Gabriel Investment Syndicate, a handful of pre-seed VCs, and some individual angels who might invest £100-300k, but the options are limited. My advice for any startup is: ▪️ Bootstrap as much as possible. Jessica Mullen shared her experience, offering many valuable lessons. ▪️ Use debt and working capital management if possible. ▪️ Only use equity when you are convinced it helps drive a yearly value growth of 40% or more. For all three options, consider grant funding as it will accelerate growth. Grant funding is a valid reason to raise a small investment to help unlock this dilution-free money. I regularly get this question: Should I raise angel investment if I want to become a unicorn? My answer is no. The journey from pre-seed to Unicorn requires Power Law investors. Investors who build portfolios where the majority (90%+) will fail, but the successful ones will generate a 50x return or higher. They would be ok with the high valuations from the early start. Most angel investors will not have the ability to support a large enough portfolio or participate in follow-up rounds to make Power Law investing work. Even if they can, there is an increasing trend for late-stage investors to use financial instruments to erode the financial gains of early-stage investors. However. There is only a very small percentage of start-ups that would be suitable for Power Law investment. Most companies raising funds are better suited to alternative models, such as the SEIS dividend/Founder buy-back model. My advice on Tuesday was to fully understand what type of company you want to be before your first raise. I'm getting slightly annoyed by "Advisers" giving power law investment advice to every company without understanding the financial logic behind investing. For most universities, it should not be too difficult for the economics/business department to provide their start-up students with a basic introduction to financial theory. 🙂

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